Retail Sales Rebound as Jobless Claims Decline in U.S.

Sales at Macy’s, the second-biggest U.S. department-store company, fell 0.7 percent, while the average projection from analysts surveyed by Retail Metrics called for an increase. Photographer: Scott Eells/Bloomberg

Dec. 13 (Bloomberg) -- Retail sales rebounded in November
and applications for jobless benefits fell more than forecast
last week, pointing to strength in U.S. consumer demand as the
holiday-shopping season gets under way.

Purchases climbed 0.3 percent following an October decrease
of 0.3 percent, Commerce Department figures showed today in
Washington. Unemployment claims fell by 29,000 to a nine-week
low of 343,000, the Labor Department said. Economists forecast
369,000 first-time claims, according to the median estimate in a
Bloomberg survey.

“We’re off to a fairly strong holiday-spending season,”
said Millan Mulraine, senior U.S. strategist for TD Securities
in New York, who correctly projected the November sales gain.
“Consumer spending could offset some of the weakness” in other
areas such as corporate investment, he said.

Americans snapped up clothes and electronics at stores and
online last month, while vehicle sales jumped as some Northeast
residents sought replacements for autos damaged by superstorm
Sandy. Another report showed consumer confidence cooled,
underscoring the effects of limited job opportunities that
prompted the Federal Reserve yesterday to boost record monetary
stimulus.

Stocks fell, snapping a six-day advance in the Standard &
Poor’s 500 Index, amid a standoff in federal budget
negotiations. The S&P 500 dropped 0.6 percent to 1,419.45 at the
close in New York.

Ten of 13 major categories in the retail sales report
showed November gains, led by a 1.4 percent increase at auto
dealers, a 2.5 percent jump at electronics outlets and a 0.9
percent gain at clothing stores.

Limited Brands

Limited Brands Inc., the operator of the Victoria’s Secret
lingerie chain, reported comparable sales rose 5 percent in the
month, topping projections for a 3.4 percent gain. December
sales may increase in the “low-single digits,” the company
said on a Nov. 29 call. Columbus, Ohio-based Limited Brands said
Sandy reduced its November comparable-store sales growth by as
much as 2 percentage points.

At the same time, consumer confidence stagnated last week,
showing a lack of improvement since October as lawmakers
continue to search for common ground on taxes and government
spending in 2013.

The Bloomberg Consumer Comfort Index slipped to minus 34.5
in the period ended Dec. 9, the lowest level in six weeks, from
minus 33.8. The reading was the 12th straight above minus 40,
the level associated with recessions and their aftermath. The
decrease was within the margin of error of 3 percentage points.

Gasoline Prices

Retail sales were projected to climb 0.5 percent in
November, according to the median forecast of 81 economists
surveyed by Bloomberg. Cheaper gasoline led to the largest
decline in service-station receipts in four years and restrained
the value of all purchases.

Energy costs fell the most since March 2009, contributing
to a larger-than-forecast drop in wholesale prices last month,
another Labor Department report showed. The producer price index
decreased 0.8 percent, the most since May, after falling 0.2
percent in October. The median forecast in a Bloomberg survey
called for a 0.5 percent decline. The core measure, which
excludes volatile food and energy, increased 0.1 percent after
falling 0.2 percent.

Cars and light trucks sold in November at a 15.5 million
annual rate, the fastest pace since February 2008 and up from
14.2 million in October when Sandy kept East Coast shoppers away
during auto dealers’ busiest time of the month, data from Ward’s
Automotive Group showed. Ford Motor Co. deliveries of cars and
light trucks climbed 6.4 percent and General Motors Co. sales
gained 3.4 percent, the companies said Dec. 3.

General Merchandise

One of the weaker categories last month was general
merchandise stores, where sales dropped 0.9 percent.

Sales at Macy’s Inc., the second-biggest U.S. department-store company, fell 0.7 percent, while the average projection
from analysts surveyed by Retail Metrics called for an increase,
industry figures earlier this month showed. Kohl’s Corp. of
Menomonee Falls, Wisconsin, said same-store sales dropped 5.6
percent, also in contrast to estimates for a gain.

Filling-station sales fell 4 percent, the biggest decrease
since December 2008, as cheaper gasoline held back receipts. The
Commerce Department’s retail sales data aren’t adjusted for
prices. The average cost of a gallon of gasoline was $3.44 in
November, down from $3.70 in October, according to AAA, the
largest U.S. auto organization.

Non-store retailers such as online merchant Amazon.com Inc.
showed a 3 percent jump in sales, the most since October 2011.

Building Materials

Sales at building-material stores climbed 1.6 percent, in
part reflecting improved demand on rebuilding efforts along the
East Coast following superstorm Sandy.

The Commerce Department said it wasn’t able to quantify the
effects of Sandy. The agency said respondents reported both
positive and negative effects from the storm.

Sales excluding autos, gasoline and building materials,
which are the figures used to calculate gross domestic product,
climbed 0.5 percent in November after being little changed in
the previous month.

Household spending is unlikely to accelerate without faster
hiring. Payrolls rose by 146,000 in November following a revised
138,000 increase in October that was less than initially
estimated, figures showed last week.

Higher Taxes

Americans also face the possibility of more than $600
billion in tax increases and government spending cuts next year
unless lawmakers agree on a budget before the end of the month.

Fed policy makers yesterday said the central bank will buy
$45 billion a month of Treasury securities starting in January,
expanding its asset-purchase program, and linked the outlook for
its main interest rate to unemployment and inflation.

“The committee remains concerned that, without sufficient
policy accommodation, economic growth might not be strong enough
to generate sustained improvement in labor-market conditions,”
they said in the statement.